New and small firms have to file 37 returns all together in a year. Will this reduce efficiency?

From 1st July 2017, Indian Taxation System went through a paradigm shift with the introduction of Goods & Service Tax, replacing some of the Central and State taxes like CENVAT, Excise the Customs, VAT, State Excise, etc. It has been predicted that the levy of GST will do away with the cascading effect of taxation on goods & services in circulation throughout the country. Industry experts believe that it will bring down the prices of goods and services and would also help in bringing down the inflationary rates of the country.

Prime Minister, Mr. N Modi assured the nation of its requirement on GST Launch Event. He detailed on the fact that GST would help curb tax evasion and corruption by bringing about the entire nation under a uniform code of taxation.

Small businesses bear the maximum brunt of new tax regime under GST

The Government on launch of GST chose to address some of the speculations doing rounds regarding the complexity in procedures and compliances. Under GST, many small traders and business establishments find themselves drawn into the ambit of tax and compliances. Clearing all these doubts, Mr. Modi cited that GST was aimed to simplify multiple compliances in existence earlier under several State and Central taxes. Here, it would a single set of GST return filing with Goods & Service Tax Network (GSTN) server for an overall compliance under this Act.

However, several industry experts expressed their concern over the requirement to file a total number of 37 returns in a year which seems like an informidable task-in-hand for smaller businesses and establishments. These firms, in most cases, still prefer to deal in physical invoices, thus, facing a major issue in the near future in converting their operations to a digital platform. Many of them claim their inability to comprehend the complexity of ERP’s and Accounting Software, with some even claiming inaccessibility to the Internet.

Clarifying the growing concern over the filing of 37 returns in a year, with an average of 3 returns in a month, Revenue Secretary Hasmukh Adhia issued a statement where he mentioned that the companies are effectively filing one return with rest of the two taken care with very little efforts on the part of the taxpayer.

However, it is clear from the issued statement that every company has to go through the filing of returns 3 times in a month which would be accompanied with creation of GST compliant invoices and reconciliation of invoice details between supplier and recipient before filing of GST returns in the end of every month.

In order to settle some of these confusions, GSTN came up with a list of 34 companies as GST Suvidha Provider whose services can be availed by the tax payers. Their services would offer a complete onboarding for the smaller firms and businesses, making them compliant with the GST compliance requirements.

These services would be offered in the form of ASP-GSP Solution which would help the taxpayers with Invoicing, Reconciliation and Return Filing. Bringing about an end-to-end solution for GST compliances, Taxmann has launched its GSP services armed with best in-class technology and domain knowledge spanning over 5 decades.

With the help of the GST Compliance software, One Solution, taxpayers can easily create and upload the details of GST compliant invoices with the GSTN. As the details of sales invoices are generated and filed through GSTR-I, these details get automatically updated in the GSTR-II of the purchaser. Upon amends and modification during reconciliation, if necessary, this GSTR-II can be easily uploaded with the GSTN by 15th of every month to signify the Input Tax Credit available to the purchaser.

GSTR-III is auto-populated which uploads the details of the net tax payable after considering the Input Tax Credit available for deduction from the total Tax liability. These details are filed with GSTN by 20th of every month. Taxmann’s One Solution is integrated compliance software which helps small businesses and firms make their establishments compliant with GST norms with maximum ease and minimum efforts. Import business data seamlessly through Excel or synchronize your existing Accounting Software to create Master database of key information.

To sum up, it would be correct to quote our Prime Minister here who said that this new tax regime is similar to wearing a new spectacle. Although it entails some adjustments, overall it aims at a better future for India unified under a single code of tax law for goods and services.

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